Correlation Between Scandinavian Tobacco and Kinetik Holdings
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Kinetik Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Scandinavian Tobacco and Kinetik Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Tobacco Group and Kinetik Holdings, you can compare the effects of market volatilities on Scandinavian Tobacco and Kinetik Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Scandinavian Tobacco with a short position of Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Kinetik Holdings.
Diversification Opportunities for Scandinavian Tobacco and Kinetik Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and Kinetik is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings and Scandinavian Tobacco is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Scandinavian Tobacco Group are associated (or correlated) with Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Kinetik Holdings go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Kinetik Holdings
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the Kinetik Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Scandinavian Tobacco Group is 1.91 times less risky than Kinetik Holdings. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Kinetik Holdings is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 4,886 in Kinetik Holdings on August 26, 2024 and sell it today you would earn a total of 1,279 from holding Kinetik Holdings or generate 26.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Kinetik Holdings
Performance |
| Timeline |
| Scandinavian Tobacco |
| Kinetik Holdings |
Scandinavian Tobacco and Kinetik Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Kinetik Holdings
The main advantage of trading using opposite Scandinavian Tobacco and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Kinetik Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kinetik Holdings will offset losses from the drop in Kinetik Holdings' long position.| Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. RLX Technology | Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. Turning Point Brands |
| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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